As per local reports, the experts are worried that increasing supplies and falling consumption of rice in South Korea may lead to a decline in prices in rice domestically. Based on the data from Statistics Korea, the government is expecting 2015 rice production to increase about 0.4% y/y to around 4.25 million tons (basis milled). According to the sources, an increase has been observed higher than the average production by about 7.5%. The production is likely to increase despite a fall in acreage by about 2% to around 799,000 hectares this year from around 816,000 hectares last year. Further, the acreage has also been declining consistently since 2010 from around 892,000 hectares.
According to the Agriculture Ministry sources, meanwhile, it has also been observed that rice consumption has also been declining since 2005. In addition, the per capita consumption of rice has fallen to 65.1 kilograms in 2014, from 80.7 tons in 2005. However, at the same time, the demand for flour based foods is increasing. Thus, per capita consumption of flour reached a record of 33.6 kilograms in 2014, which is the highest since 2006. Furthermore, the farmers are expecting that the government should procure more rice from them to avoid price falls amid rising supplies. It has been indicated that the price of a 80 kilogram pack of rice has already declined to around 170,000 won (around $150) from the average 188,000 won (around $166).
In this matter, an official from the Agriculture Ministry revealed that the government is not planning to increase the reserves. However, the amount of reserved rice has been set up based on the international standard, allocating around 17% of consumption. Further, it was added that although, even if it’s raised, but it is not possible due to shrinking in consumption. Even, some farmers have expressed that an increase in imports are also increasing supplies in the country as well.